Mining News

Colombia’s security situation still a concern to mining companies

Peter Koven’s reporting from PDAC
2014 in the Financial Post included an interview with the Colombian mining and
energy minister, Amylkar Acosta.

Acosta said the recent peace talks with FARC rebels in Havana have
cooled tensions with all rebels significantly. He said kidnappings have been reduced,
and there have been promises from rebels to stop the acts as a result of the Havana
talks.

“We have never been so close to achieving peace,” he said through an interpreter.

While the government’s commitment towards peace is commendable, the
security situation in Colombia is still of concern to mining companies operating in
the region. Koven notes:

Last year, an executive from Canadian junior miner Braeval Mining
Corp. was kidnapped, and more than 20 employees of Talisman Energy Inc. were
kidnapped in 2011. All were freed, but the incidents renewed safety and security
concerns within the country.

The results of the 2013
Survey of Mining Companies reflect this concern in Colombia, and there was a
notable increase in the percentage of respondents rating that they were strongly
deterred or would not pursue investment in Colombia as a result, increasing from
30% in 2012/2013 to 55% in 2013. The trend over the last five surveys is also
somewhat mixed. After decreasing the percentage of such negative responses from
2009/2010-2011/2012, the past two years have seen this trend reversed.

Nonetheless, the security situation in Colombia is much less of a barrier to
miners than in 2006/2007 when Colombia was first added to the survey. In that
year, 43% of respondents rated security as a strong deterrent to investment and an
additional 40% would not pursue investment as a result.

Colombia’s score and ranking in this year’s survey decreased, indicating that it
was less attractive to mining investment. This is the fourth year in a row where
Colombia’s score has declined. Between the 2012/2013 and 2013 surveys,
Colombia’s rating dropped most in uncertainty concerning the administration,
interpretation and enforcement of existing regulations; trade barriers, and for
regulatory duplication and overlap.